New rules will make water heaters more energy efficient, lead to savings

HOUSTON – New federal rules are taking effect in April that will mean changes for anyone buying or installing a new hot water heater. The new requirements will make the appliances more energy efficient, but it's going to mean higher costs and possible some headaches for homeowners.

Starting in April, all newly manufactured water heaters will have to be more efficient. You'll see higher energy ratings on almost all gas, electric and tankless water heaters meant for homes. The goal is to cut down on emissions and save billions of dollars in energy costs.

Angie Hicks of Angie's List says the regulations will eventually lead to savings at home.

"Your water heater is the second largest consumer of energy in your home right behind your heating and cooling system. So, any improvement in your water heaters efficiency is going to pay dividends in your monthly utility bills," Hicks explained.

You'll notice the most dramatic changes in larger capacity models over 55 gallons, which are typically found in bigger homes. The cost for one of these will be going up significantly, according to water heater expert Chip Cochran.

"You will have to buy a heat pump water heater and those water heaters on top of them will have a compressor and an evaporator coil, a whole refrigeration system similar to what your refrigerator has in order to heat the water cheaper. When this happens, it's going to double or triple the price of a new water heater, electric or gas, if it's over 55 gallons," Cochran said.

If your current water heater is stored in a small utility closet or crawl space, you may need to find a new place for a newer model that requires more insulation and equipment.

"It's going to be bigger. It's going to be taller. It's going to take up more room. A lot of water heaters are installed in a very tight quarters. So, all of these things could be a major impact if you are replacing a water heater after April in 2015," Cochran explained.

So if it's almost time to replace your water heater, you might want to do it before April. You'll save on convenience and cost now, but you'll lose on long-term efficiency.

Hicks recommends replacing your water heater now, if it's more than 10 years old and in a location where a leak would cause damage. Don't know how old your water heater is? Look for the model and serial numbers on your unit. That information has the age and gallon capacity coded into it, which a professional can decode.

There are three major signs your water heater is at the end of its life. Look for rusty colored water. That's a sign of an impending leak. If you hear a rumbling or banging noise from the tank, that's another red flag. And if you see water around the tank, that's a sign of cracking and it may be time to replace.

Angie's List guide to buying a hot water heater

U.S. Department of Energy Water Heater Standards